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USPTO Director on the Fifth Anniversary of the AIA

Why it matters: U.S. Patent and Trademark Office (USPTO) Director Michelle K. Lee recently spoke at two events in Washington, D.C., in conjunction with the fifth anniversary of the enactment of the America Invents Act (AIA). As Director Lee made clear, she believes that the AIA has made a positive impact on the USPTO's operations and its stakeholders over the past five years and looks forward to continued improvements and progress in the years to come.

Detailed discussion:

USPTO Director Michelle K. Lee recently spoke at two events in Washington, D.C., in conjunction with the fifth anniversary of the Leahy-Smith America Invents Act (AIA) in September 2011 (it was signed into law by President Obama on September 16, 2011). On September 22, 2016, Director Lee gave prepared remarks at the official America Invents Act Fifth Anniversary Event. The week before that, on September 15, 2016, Director Lee participated in a "fireside chat" at the 2016 ChIPs Women in Tech, Law and Policy Global Summit.

America Invents Act Fifth Anniversary Event

Director Lee began her speech by highlighting a few of the "far-reaching changes brought about by the AIA" over the past five years since its enactment. She started with one that was "near and dear" to her heart, which was the establishment of the first USPTO regional offices: "AIA called for creation of three such offices. Instead we created four—in Dallas, Denver, Detroit, and the Silicon Valley." Director Lee said that these regional offices, each with a "full complement of talented examiners and judges on hand," help fulfill the AIA's commitment to "provide key USPTO resources and outreach in the heart of our nation's most innovative regions" and serve to "[save] inventors and entrepreneurs a lot of money by allowing them to do business with our agency closer to where they live and work, rather than here in the nation's capital." Director Lee said that she sees "nothing but upside to these regional offices—for our stakeholders and for the Agency."

Director Lee next turned to the second positive change created by the AIA, which was the new Patent Trial and Appeal Board (PTAB) and new post-grant proceedings such as inter partes reviews (IPRs) that "provide a faster, lower cost alternative to district court litigation to test the validity of a patent." Director Lee pointed out that, since the AIA's inception in 2011, "the Board [has] received ~5,500 petitions for its new post-grant proceedings—that's more than 3x number expected. And the Board did this without missing single statutory deadline, while also maintaining a respectable affirmance rate before the U.S. Court of Appeals for the Federal Circuit." Director Lee continued,

The PTAB proceedings are helping to ensure that the patents in our system are the ones that should be; and those that should not, are not. With a total of over 270 judges—123 of them added since the Board's inception—the Agency is faithfully meeting Congress's mandate. And, importantly, looks forward to continuing to do so through further well-reasoned rulings and enhancements to our proceedings to make them even more fair and effective within our statutory authority. That's a success story, not just for patent stakeholders but also the quality of our patents more broadly in our system.

Director Lee next highlighted the fee-setting authority afforded by the AIA as a major benefit, which has allowed the USPTO to focus on the agency's mandates. Director Lee emphasized that key among these are improvements in patent quality, specifically through the "Enhanced Patent Quality Initiative, made possible by the fee-setting authority in the AIA." Director Lee said that, "[t]hrough this Initiative, we have launched almost a dozen programs designed to improve the quality of the patents we issue—before, during and after examination, all designed to make sure the Agency issues patents both accurately and clearly, all for the benefit of American innovators."

Director Lee also pointed out "[o]ther benefits of our greater financial stability enabled by the AIA's fee-setting authority" such as "the USPTO's ability to weather government shutdowns, improve our IT systems, and lower our backlog of patent applications and reduce pendencies." According to Director Lee, the reduction in backlog was especially crucial: "Due in large part to the ability to hire more patent examiners for our nationwide workforce, we've been able to reduce our backlog of newly filed patent applications by 28% from its all-time high in January 2009 to the present, despite an average ~4% year over year increase in filings. That is significant and we are well on our way to reducing our backlog further and hitting our optimal target by 2019." Director Lee said that when she testified before the House Judiciary Committee's PTO oversight committee (Subcommittee on Courts, Intellectual Property, and the Internet) on September 13, 2016, she specifically asked Congress to reauthorize this fee-setting authority as it is a "critical component in allowing us to function."

Director Lee concluded that:

during the period the Agency has been diligently implementing the AIA mandated changes, the value that patents and IP more broadly contribute to our national economy has increased. So it's important that we get this right! Highlighting the importance of IP to our economy, today, in conjunction with our partners within the Department of Commerce, we released a report on IP-intensive industries showing that IP directly and indirectly supported 45.5M jobs, nearly 1/3 of all U.S. employment. That's an increase of more than six million jobs since 2010! At the same time, the share of our national GDP attributable to IP-intensive industries increased from 34.8% to 38.2% over the same time. What this suggests, to me, is that our laws and our economy are moving in the right direction when it comes to IP. And I don't expect that trend to change any time soon, because one of the more beneficial, but perhaps unintended, changes brought about by the AIA—from my perspective—is that it has created a more truly open and dynamic patent system.

ChIPs Women in Tech, Law and Policy Global Summit

The week before, on September 15, 2016, Director Lee participated in a twenty-minute "fireside chat" as part of the 2016 ChIPs Women in Tech, Law and Policy Global Summit in Washington, D.C. According to one observer, during the chat Director Lee said that she considers the post-grant proceedings created by the AIA to be a form of "quality check" on already-issued patents. As she would reiterate a week later, Director Lee said that patent quality—something that the AIA has promoted—is critical:

I want to put an emphasis on high quality, because that's been a subject of a lot of conversation. We know that there's legislation pending on the Hill designed to curtail, among other things, abusive patent litigation. We've heard a lot of stories about various entities who are taking patents and claims and trying to stretch them to cover products and industries that, perhaps, they were not meant to cover. So in my mind it is really incumbent on the U.S. Patent and Trademark Office to issue the very best quality patents possible. We do so—and we should do so—because if we don't do so, it creates a business uncertainty and cost. So your clients, your companies, are going to have to make decisions based upon rights that may or may not be clear.

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